After strict COVID lockdowns in China, the country is seeing an uptick in factory activity, improving global supplies of parts and semiconductors, and helping better vehicle supplies and lower waiting period in future.

This improvement would fuel growth in an already healthy passenger vehicle category, the automobile dealers' body said.

Passenger vehicle (PV) sales jumped 22% year-on-year to 3,40,220 units in January, while it grew 8% from pre-COVID 2020 levels, helped by healthy bookings and improved supplies, FADA data showed.

Maruti Suzuki, with a market share of 44.1%, registered sales of 1,50,046 units last month.

Two-wheeler sales grew 10% to 12,65,069 units year-on-year, but were down 13% compared to January 2020, as rural markets lagged, according to the FADA data.

"While good enquiry, healthy bookings and improved supplies are helping aid this segment, it is the entry-level sub-segment which is still feeling the pinch," the body said.

The latest financial budget, with changes made to the income tax rules, could help boost the entry-level demand, it added.

Three-wheeler demand stayed strong, growing nearly 59% and nearing pre-pandemic levels, benefiting from demand in commercial space and the government's electric vehicle subsidy for public and shared transportation, the data showed.

(Reporting by Anisha Ajith in Bengaluru; editing by Eileen Soreng)